The ACLU is reporting on a heinous new proposal being made by the private prison industry to almost every state:

If you live in one of 48 states, right now there’s a proposal sitting on your governor’s desk from a company called Corrections Corporation of America (CCA). That for-profit corporation is offering to buy and run prisons across the nation. In exchange, states must agree to keep the prisons at least 90 percent full. Two articles in USA Today examine the ethical concerns raised by the proposal. . . . And, since private prisons thrive from keeping the bottom line low and their profits high, they have an incentive to cut corners — meaning lower-paid, less experienced staff and little accountability. The results can be troubling: in 2008, a study by the Idaho Department of Corrections found that the CCA-run Idaho Correctional Center (ICC) had four times as many prisoner-on-prisoner assaults as Idaho’s other seven prisons combined.

Privatizing prison leads to much more prison violence, as indicated in the following video:

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (4)

CCA makes money by hiring out inmates. The inmates get $1 per day for clerical jobs, CCA rake in the cash Tennessee has around 30,000 inmates in the state prison system and CCA hires a large percentage of those inmates out as a slave labor force.
Tennessee is one of many states, using the Occupy protests as an excuse to pass ALEC written laws outlawing camping on public property. In Tn, the new law carries a penalty of a $25,000 fine and up to 364 days in prison. The effect of this law will make homelessness a felony.
With the sale of the prisons to CCA, we will see a resurgence of the debtor’s prison.
On top of this is the fact that when government facilities and services are sold to private, for profit, corporations, the venture eventually fails and is sold back to the government in poor condition many years later.

I’m a big fan of leaving the private sector the hell alone to create wealth. What I’m not a fan of is this dogma that the private sector does everything better than the public sector. Operating prisons is a core governmental function.

The private sector works when it works because of competition. When competitive forces aren’t a factor, the private sector has all the pathologies of the public sector. Simply taking a government function and privatizing it doesn’t change anything except to give a private company the ability to skim some profits. The only time privatization works is when what the government was doing wasn’t a core government function in the first place, such as operating a factory.

Adam: I thought this article did a good job of summing up where the “free market” works and doesn’t work. Here’s where it doesn’t work:

– Activities that are an intrinsic function of government
-Activities where pertinent third parties are totally unrepresented in the transaction
-Monopolies
-Scarce resources which are essential to American citizens
-Situations where free market principles cannot operate because of lack of essential information
-Services which are required for the public’s welfare

I think that’s way too broad. The first I agree with completely. The second isn’t a failure of the free market so much as an area where the tax system can be used to price in the cost to third parties of consensual transactions between two parties. A carbon tax is a great example. The third is absolutely true, but for some reason government likes to support monopolies sometimes. If you’re going to have a monopoly, better for the government to just run it itself. State mandated monopolies are always bad policy.

The last three though, I disagree with completely. Scarcity is the whole reason for the market. Otherwise goods aren’t priced properly and you get shortages. Lack of information is a viable reason to be suspicious of a market, but the government will not have information the private sector lacks. The government can mandate the disclosure of pertinent information. That’s what the SEC is for. Services which are required for the public’s welfare is such a broad category. Whether or not a service is essential for public welfare does not tell you whether the private sector should provide it or the government. The question to ask is whether the private sector is supplying the service. if it is, there’s no reason for the government to do so. A good example would be food and shelter.